This summer, Olive Garden planned a straightforward promotion. The chain intended to push its longstanding offer of unlimited soup, salad, and breadsticks for a limited time. But it scrapped the plan entirely. The reason: a massive outbreak of cyclospora linked to tainted iceberg lettuce.
Olive Garden had planned to run the promotion as its lead offer for the quarter ending August 30, but the outbreak changed everything. Customers stopped buying lettuce, and the chain decided to pull the ad campaign rather than risk association with the health scare. Though Olive Garden itself was not linked to the outbreak, the fear alone was sufficient to shift the marketing approach. Raj Vennam, the chain’s CFO, confirmed the decision during an earnings call Thursday.
The CFO’s admission
The parent company’s CFO, Raj Vennam, cited consumer resistance to lettuce as a key factor behind the quarter’s sales struggles. In his remarks, he named the specific forces that weighed on the results without holding anything back.
Same-store sales at Olive Garden rose 1% in the three-month period ended August 30. That was the chain’s lowest same-store sales result since late 2024. The numbers came out Thursday alongside Darden’s full quarterly report.
What hurt the numbers
Vennam said the World Cup and lettuce worries combined for a drag of 150 to 200 basis points on sales. Smaller portion choices cost the mix 50 basis points. The company is now comparing against nearly 6% of same-store sales growth from a year earlier.
During the call, Vennam explained the situation in simple terms, and the pairing gave his side command of the quarter’s performance was dragged down by events beyond the chain’s.
Sales began to recover
The chain’s results improved as the quarter progressed, according to Vennam, who noted that the lettuce and World Cup headwinds had eased. The Never-Ending Pasta Bowl promotion was launched in late August, and the chain has reported a positive response to it.
The direction of the quarter changed as it progressed.
The comeback plan
Darden CEO Rick Cardenas is bringing back the unlimited soup, salad, and breadsticks promotion at Olive Garden, aimed at boosting weekday lunch sales. The lunch period continues to be a focus for the company, according to Cardenas, who described it as “a meaningful opportunity for the brand.”.
A new lunch platform will be tested by the chain, starting with a “highly competitive value proposition and includes the abundance that differentiates Olive Garden.”.
Guidance stays in place
The company kept its outlook for the 2027 fiscal year, which started in June, unchanged. While Olive Garden faced challenges, Darden saw strength elsewhere across its operations.
The bigger picture
The quarter was a mixed bag for Darden’s portfolio. Same-store sales across all of Darden’s brands rose 3.2% overall.
The report detailed a significant 6.8% expansion at LongHorn Steakhouse, along with 1% for the fine dining category and 4.5% for the Other Business segment, which covers Cheddar’s Scratch Kitchen and Yard House.
Revenues came to $3.2 billion, with $1.3 billion from Olive Garden and $860 million from LongHorn. Earnings dropped by 9.4%, settling at $233.4 million.
For the quarter, Olive Garden added 20 net new locations, bringing its total to 953, while LongHorn added 29, reaching a total of 624.
Why the fear mattered
Even though Olive Garden was not implicated in the lettuce outbreak, the fear surrounding it was enough to change the chain’s marketing plans and weigh on its sales.
Vennam admitted the hit outright, pointing to the lettuce worries and the World Cup as the causes behind the negative effect. The chain decided to sit tight, bring the promotion back at a later date, and try out a fresh lunch platform.
What this means for diners
The lunch deal is making a return, and with it comes a fresh way of doing things through the testing platform.
The takeaway for diners is straightforward: the promotion offering unlimited soup, salad, and breadsticks is coming soon, though it is not available right now.
Key facts
- Same-store sales at Olive Garden rose 1% in the quarter ended August 30
- That was the chain’s lowest same-store sales result since late 2024
- Lettuce concerns and the World Cup hit sales by 150 to 200 basis points
- Lighter portion choices hit mix by 50 basis points
- Olive Garden was lapping same-store sales growth of nearly 6% a year ago
- Darden reaffirmed guidance for the 2027 fiscal year, which began in June
- Total revenues were $3.2 billion, including $1.3 billion for Olive Garden and $860 million for LongHorn
- Net earnings declined 9.4%, to $233.4 million
- Olive Garden added 20 net new restaurants, bringing the total to 953
- LongHorn added 29, bringing its total to 624
The tale serves as a warning about how chains can be drawn into sales pressure from outbreaks that have nothing to do with them. Olive Garden did not send out the contaminated lettuce, yet it still had to pay the price.
The lettuce worries and the World Cup were named by Vennam as the causes behind the hit, and he spoke of them together as the sources of the negative effect. In answer, the chain decided to sit tight, bring the promotion back later, and try out a fresh lunch platform.
The comeback has begun, yet the current period has passed. The next set of numbers will reveal if the renewed push and the fresh meal service can narrow the distance between where the company stands now and where it wants to be.
Right now, Olive Garden is carrying out a plan that recognizes its mistakes and attempts to correct them. The restaurant chain is wagering that patrons will come back once their fears subside.
Source material: “Cyclospora outbreak put a damper on Olive Garden’s summer,” Nation's Restaurant News.
Get the Notebook.
The day's best stories and every fresh verdict, in plain English, in your inbox by seven. One email a day, no more.